The week begins with significant rises in stock markets and retracements in bond yields, after the United States and China agreed to resume trade negotiations.
Both countries agreed on Saturday to resume trade negotiations, President Donald Trump offered some concessions to his Chinese counterpart, Xi Jinping, at the meeting held in the framework of the G20 summit in Japan. The US president promised not to make new tariff increases and will allow US companies to sell their products to the Chinese manufacturer Huawei.
On the other hand, the data published last Friday showed that the consumer price index in the United States fell to 1.5% in May. This is a key indicator for the monetary policy of the Federal Reserve and led investors to bet on an aggressive policy of monetary easing by the Fed.
In addition, China’s Manufacturing PMI released this morning has shown an unexpected drop from 50.2 to 49.4 points, its worst figure since January. Readings below 50 points in this indicator reflect contraction in activity and increase expectations of further stimulus measures.
The composite index of Shanghai closed the session on Monday with an advance of 2.16% at its highest level since the end of April, while the Nikkei 225 of Japan rose 2.13% reaching a maximum of two months and now it is trading at 21,729 points.
US stocks closed the session on Friday with moderate increases, but finished the month of June with advances above 7% and closed the first half with increases of 14% in the Dow Jones, 17% in the S&P 500 and 20, 8% on the Nasdaq 100.
Europe has started the first session of July with advances of 1.57% in the German DAX 30, 0.93% in the FTSE 100 in London and 0.87% in the CAC 40 in Paris. The Ibex 35 rises 0.74% to 9,267 points.
In the daily chart of the Frankfurt DAX 30, we observe that the week starts with a new annual maximum, it is surpassing the resistance of 12,450 points and there are no references of resistance up to 13,200 points. If I finished surpassing this level, it could continue advancing until reaching the maximum of 2018, set at 13,600 points.
In the Forex market, the dollar index rose in the Asian session above 96 points, the euro is back to 1.1320 dollars, while the pound sterling falls to 1.2665 dollars. The US currency rises sharply against the yen, at this time the dollar is trading at 108.35 yen.
In the commodity markets, the barrel of West Texas closed Friday’s session with a decline of 1.62% at 58.47 dollars per barrel. In the month of June it was revalued by 8% and ended the semester with an advance of 27.5%.
The price of spot gold remained stable, trading around USD 1,410 per ounce and closed the first half with a revaluation of 10.3%. However, in the Asian session today it lost 1.8% to $1,348, due to the rise of the dollar and the improvement of trade relations between the US and China.
On the economic front, manufacturing PMIs fell more than expected in the main European countries and in the euro area as a whole. Germany’s unemployment rate remained stable at the forecast 5%, while in Italy it fell from 10.2% to 9.9%.
Later in the day, the unemployment rate for the Eurozone and the PMI for the manufacturing sector in the United States will be published.